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A bit more on Malthus

1. In my previous post on this, I used a figure I took from Brad DeLong. Brad, however, took the figure from Gregory Clark’s A Farewell to Alms. I stand corrected.

2. Conor Clarke offers another figure from A Farewell, showing estimates of real income per capita back to the Bronze Age:

The two figures actually illustrate slightly different points. What the figure above shows is that over a roughly 3000 year period, during which there was obviously quite a lot of technological progress — iron plows, horse collars, mastering the cultivation of rice, the importation of potatoes into Europe, etc. — living standards basically went nowhere. Why? Because population growth always ate up the gains, pushing living standards back to roughly subsistence.

The figure I used in the previous post helps suggest why: technological change was slow — so slow that by 1600 or so, when England had finally reclaimed its population losses from the Black Death, it found real wages back to more or less 1300 levels again.

And here’s the sense in which Malthus was right: he had a fundamentally valid model of the pre-Industrial Revolution economy, which was one in which technological progress translated into more people, not higher living standards. This homeostasis only broke down when very rapid technological change finally outstripped population pressure for an extended period.

Of course, Malthus’s predictive failure wasn’t accidental. Technological takeoff was the product of a newly inquisitive, empirically-minded, scientific culture — the kind of culture that could produce people like Malthus.

The Industrial Revolution presumably broke the Malthus Trap and led to a sustained rise in Real Incomes – in Europe!!! What about else where in the world? The Industrial Revolution also gave rise to Globalization and the economic dominance of Europe over the rest of the world. To what extent can this Rise in Income Per Person be attributed merely to a redistribution of wealth from other parts of the globe to Europe? Further, now that Emerging Markets are becoming increasingly competitive in the 21st century, is it posssible that this break with the Malthus Trap be reversed?

This is a very nice post with a great illustration. However, given your recent article on climate change, I find it misses an important and prudent emphasis on the very strong connections between the “Great Divergence” and energy use. For example, the graph you provide nicely tracks the demand for fossil fuels (and clearly lags the (in)famous “hockey stick” graph of world temperature departures). The dramatic rise in living standards in the west over the past 200 years has been fueled by… fuel. Energy has and always will be the key to doing useful work. Just ask any physicist.

On the left, we usually push for renewable energy because we worry about pollution, global warming, etc. This certainly isn’t all there is to the arguments of course, but the common perception is effectively that liberals are just morally opposed to harming the earth, or something. But there’s another, much more selfish reason for liberals to push for renewable energy investment, even if they don’t care about pollution or climate change: given the finite supply of fossil fuels, our organic arugula-eating days are numbered.

What the right doesn’t seem to realize (or at least doesn’t discuss in public) is that this is also a threat to their livelihood. It’s depressingly ironic that the jingoistic nonsense passing through the GOP these days (“Drill, baby, drill!”) can lead only to the eventual end of the United States’ primacy in the world and a severe reduction in our standard of living.

I wonder just how the world would look like without the discovery of fossil fuels and the ability to use electrons for communicating across vast distances. Take those two away and the great divergence might disappear entirely from the graph above.
Having said that, how do you think the graphs for China, India and Persia look like during the European dark ages?
For instance consider what Panini, an Indian grammarian was doing back in the 4th century BC or so (see excerpt from wikipedia below). Such deep intellectual pursuits do not happen in a vacuum.

Pāṇini’s use of metarules, transformations, and recursion together make his grammar as rigorous as a modern Turing machine.The Backus-Naur form (Panini-Backus form) or BNF grammars used to describe modern programming languages have significant similarities to Pāṇini grammar rules. Pāṇini’s grammar can be considered to be the world’s first formal system, well before the 19th century innovations of Gottlob Frege and the subsequent development of mathematical logic. To design his grammar, Pāṇini used the method of “auxiliary symbols,” in which new affixes are designated to mark syntactic categories and the control of grammatical derivations. This technique was rediscovered by the logician Emil Post and is now a standard method in the design of computer programming languages.

There is still a rather hard upper limit in place, which will be in place for quite a while still, and that is the total living capacity of the Earth. Conventionally this would be measured in square feet, but perhaps a better measure today would be the amount of GHG we can have in the atmosphere without killing large swaths of the population or destroying their livelihood. Indeed, the ongoing struggle between rising population growth and the need to curb emissions represents the potential Malthusian crisis of our lifetime.

Conor’s graph reminds me of another graph… I think they call it the “hockey stick” graph?

One could almost draw the correlation between per capita income and global heat levels. As if per capita income could be rated in, say, BTUs… Would that mean that carbon control means a decline in per capita income? And, if so, how much would per capita income have to decline to get back to the Malthusian standard? Could the difference between that and the reduced per-capita income after carbon control is implemented be termed a “correction”?

One last question… had the Malthusian model held, what would be today’s per capita income?

“Of course, Malthus’s predictive failure wasn’t accidental. Technological takeoff was the product of a newly inquisitive, empirically-minded, scientific culture — the kind of culture that could produce people like Malthus.”

Yes, an exactly correct and excellent point.

We should not overlook the point made by someone in the comments of the original article who asked if it also had something to do with unsustainable energy use. This is think is a valuable insight because of it’s corollary.

My math professor in college pointed out that Newton (and Leibniz) invented calculus right about the time that that graph of population took off for the moon (late 1600’s to early 1700’s), and basically that was what started the whole ball rolling. Since every engineering discipline is based a lot on what could be discovered by Calculus, I wouldn’t doubt that it did have a fair amount to do with the onset of the Industrial revolution. Then, once population started going up, you had more people working on the problem, and figuring it out, the quicker the technological developments came along.

Yes, but as Gregory Clarke points out, there was significant technological improvements over at least the period from 1000 AD to the eve of the Industrial Revolution. These kinds of changes aren’t captured by measures of living standards.

A study on energy consumption commissioned by the National Academy of Sciences in about 1965 and reported by Ronald Odom of Sweden (as best I can recall) concluded something like the following:

Earth receives about 4 quads of solar energy a day which will indefinitely support a world population of no more than 500,000 humans. World population will most probably grow unchecked until, as Malthus predicted, panic and shortage of essential resources will, through war, famine, drought, and so forth, reverse population growth causing a decline to a level than can exist at subsistence level. Meanwhile, fossil fuels will have been depleted to a point at which an industrialized society could not be rebuilt.

His recommendation was that the US keep all its fuel in the ground and buy from other countries willing to sell at the spot prices in order to finish in an end position capable of winding down rationally in an otherwise chaotic world.

How much of the increased wealth after the industrial revolution is merely due to the bureaucratic revolution? I.e. – accountants perceive more wealth because all and sundry finds it’s way into a ledger somewhere. For example, how much were Mozart’s songs worth in his day, without copyright lawyers and the RIAA to enumerate and defend his “property” rights? Did every horse have a registered title? Did every peasant have a deed?

Living standards for the generality of the population in Europe went up very markedly after the Black Death due to the fact that there were far fewer people around to share the agricultural wealth. A lot more meat was eaten since land was freed from raising grain to serving as pasture for cattle. But “noble” income shrank in many cases because there were fewer peasants from whom to exact dues and payments and land went out of cultivation. Cattle raising often escaped “feudal dues”.

Was it really “very rapid technological change” that caused the switch? It seems like the pre-Industrial Revolution economies were stuck in something akin to the Prisoner’s Dilemma where having many children benefited each individual family, but when everyone has lots of children, you end up with everyone subsistence farming.

The Industrial Revolution dramatically improved the returns from investing in skills & education. That chances the calculus so that investing more time and money in raising fewer children is a more appealing strategy.

One thing that was suggested by commenters to the previous post was that the rise in living standards in the western world post-1800 was due in part to the west’s exploitation of the rest of the world. What would be interesting to see would be an estimate of world income per person divided by income percentile. The great divergence might then disappear, as an artefact of the increased coupling between nationality and income percentile.